2 Answers

Pay the high price for a sweater that is Icelandic wool and made in Iceland. There are some awesome ones in Reykjavik. Many wool products are made in Latvia but the labeling is deceiving saying "designed in Iceland".
Don't buy alcohol there. It is taxed to prevent alcoholism. Buy as much as you can afford at duty free when you arrive at KEF airport.
Don't buy bottled water at roughly $3-4 a bottle. Drink from the tap.
Everything in Iceland is 2 to 4 times more expensive than USA. Use a credit card and worry about it after your trip :)
5 months ago